Insurance laws Panama
Panama's insurance sector is governed by a robust legal and regulatory framework designed to ensure financial stability, consumer protection, and market competitiveness.
📜 Key Legislation
Law No. 12 of 2012:This law serves as the cornerstone of Panama's insurance regulation, replacing the outdated 1996 statute. It introduces modern provisions to enhance the industry's growth and aligns with international standards
Law No. 63 of 1996:Regulates reinsurance activities in Panama, establishing the framework for contracts where reinsurers assume risks already covered by insurers
🏛️ Regulatory Authority
The Superintendencia de Seguros y Reaseguros de Panamá (SSRP) is the primary regulatory body overseeing the insurance and reinsurance sectors. Its responsibilities includ:
Licensing and supervising insurance and reinsurance companie.
Ensuring compliance with capital, solvency, and reserve requirement.
Implementing corporate governance standard.
Protecting consumer interests and promoting market transparency
💰 Capital and Solvency Requirement
Under Law No. 12 of 202:
*Life insurers: Minimum capital of *USD 1.5 million.
*Non-life insurers: Minimum capital of *USD 1 million.
*Reinsurers: Minimum capital of *USD 5 million.
These requirements aim to ensure that insurers maintain sufficient financial resources to meet their obligations to policyholders
🛡️ Consumer Protectin
Panama's insurance laws prioritize consumer rights throgh:
Mandatory clear and comprehensive policy disclosues.
Regulations against unfair practices, including misleading advertising and discriminatory tems.
Establishment of alternative dispute resolution mechanisms, such as mediation and arbitration, to address consumer grievances efficiently
📈 Market Developmets
Recent reforms have aimed at enhancing market competitiveness and accessibiity:
Alternative Distribution Channel: Law No. 12 of 2012 permits insurers to distribute products through various channels beyond traditional brokers, including supermarkets and pharmacies, to reach a broader audience
Registration of Foreign Reinsurer: Foreign reinsurers and brokers are now required to register with the SSRP, submit financial statements, and appoint a local representative to operate in Panama
Insurance premiums in Panama are subjet to:
5% Tx:Applied to all insurance premiums, collected from policyholders and remitted by insurers to the General Directorate of Revenues DGI).
2% Tx: Paid by insurance companies to the National Treasury on the total premium received for policies issued for local isks.
7% Tax on Fire Insurane: In addition to the standard taxes, fire insurance premiums are subject to a 7% tax, which includes a 5% contribution to firefighters and a 2% contribution to the national treasury
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